KPIs, a vital few not a trivial many

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Don’t corporations love their KPIs and balanced scorecards? In the year 2000 I was involved in a project to apply six sigma, to the design process, at a well known mobile phone handset manufacturer.

Their notice boards were covered in pieces of dark red paper. I asked what these were. Apparently everyone had their own “vital few” KPIs. Since all the KPIs seemed to be different that actually meant there were hundreds of vital few KPIs. The management wanted a focus on the vital few and ended up with a trivial many. Can you imagine wasting your life away in these kinds of charades?

My own preference, which has its grounding in theory of constraints (TOC), is for what is known as a hedgehog strategy. To implement a hedgehog strategy, the organisation just has to choose one KPI. Just one. And, according to TOC you have to subordinate everything else to driving performance on that one measure – better get it right then!

One Response to KPIs, a vital few not a trivial many

John I loved reading your blogg and it has really got me thinking. You raise some very relevant issues that in the corporate world we all secretly appreciate, yet spend a great deal of energy trying to ensure that no one mentions the elephant in the room. There are plenty of consultants who are prepared to come into the board room and single handedly slay the elephant as proof of their grandure and knowledge or with the latest tool kit, and they eventually leave after the blood is spilled and they are wearing nearlly all of it. Good on you Coach, ‘Simplicity and Honesty’ every managers waking fantasy.